Top-name tenants in Newmarket’s growth area

11:13 AM Thursday April 21, 2016True Commercial

The six-storey Newmarket building includes brand name tenants like Tegel.

A six-storey Newmarket commercial building encompassing two interconnected office towers with dual street access, and generating net annual rental income of close to $1.265 million, offers a range of possibilities.

Located at 100 Carlton Gore Rd, with frontage also on to Morgan St, the 5345sq m building and 2643sq m of land in two titles is for sale through Bayleys by tender, closing May 12 unless sold earlier by negotiation.

The property, which has a current capital valuation of $19.7 million, is being marketed by Tony Chaudhary and Colin McKenna in conjunction with Chris Bayley, Bayleys’ international director, and David Bayley, Bayleys’ executive director.

“This is a sizeable, well-presented office building occupied by a number of big-name New Zealand tenants such as Tegel, Griffin’s and Yellow Pages,” says Chris Bayley.

“It’s in a proven and sought-after location, close to Auckland’s CBD and major motorway and public transport networks, which is undergoing considerable development activity at present led by the University of Auckland’s expanding Newmarket campus.”

The property provides ground floor retail and showroom accommodation, ground and first-floor car parking and four levels of office space above in two adjoining towers.

“The building was constructed in 1990 with reinforced concrete foundations and concrete floors, columns and beam structural frames.

Approximately 500sq m of ground floor retail space is leased to a restaurant which renewed its lease for six years in 2014 with the landlord’s fit-out including suspended ceilings, lighting, air-conditioning and carpets.

Adjacent to the restaurant is a concrete ramp providing access to first-floor car parking.

Tower B, totalling 2311sq m at 10 Morgan St, has 281sq m of ground-floor commercial space, which has been used as office accommodation and storage, as well as ground-floor and first-floor carparks.

The four office floors spread across the two interlinking towers are accessed from the ground and first-floor car parking levels by two separate 12-person lifts and stairways.

The large office floor areas of up to 1215sq m have good natural light and views across Auckland Domain and to the west, says Bayley.

“They have been well-maintained with the two main occupants, Tegel Foods and Griffin’s, having undertaken significant refurbishment works to their tenancy areas. Another major attraction for tenants, in a location where parking can be very tight, is the 114 on-site car parks.”

An aerial view of 100 Carlton Gore Rd in its Newmarket setting.

Tegel Foods, New Zealand’s leading poultry producer which employs 2300 people nationwide, is the building’s biggest tenant occupying the two largest floors totalling 2382sq m which accommodate its head office.

Well-known biscuit and snack-bar maker Griffin’s Foods, which employs approximately 800 people and was sold to a Philippines-based food giant Robina Corporation for $700 million in 2014, occupies another of the office floors. Sharing the top floor are The Fred Hollows Foundation charitable organisation and Yellow Pages which also occupies 124sq m of the showroom space on the ground floor of Tower B.

The remaining 157sq m of space on Tower B’s ground floor was vacated in March. “This is currently the only empty space in the building and offers an immediate add-value opportunity to increase the property’s income,” says Chaudhary.

“The current lease on one of the office floors is scheduled to end later this year so this could also offer some opportunities for an add-value investor or be of interest to an owner-occupier.”

Chaudhary says the building’s dual road frontages are a rarity in the area and enhance the property’s flexibility and future options.

“Both the towers are on separate stratum titles, with their own entranceways, and although they currently have interlinking office tenancies, it could be possible at some stage in the future to reconfigure and redevelop them as self-contained buildings and sell off one or both of them as separate properties.”

The property currently has a mixed-use zoning and is part of the Newmarket growth area structure plan which allows for a wide range of commercial and residential activities. It has a similar zoning under the Proposed Auckland Unitary Plan (PAUP) where it has been identified as an “urban living area” because of its good transport links and the Auckland Domain and Newmarket shopping precinct within easy walking distance.

McKenna says because of the property’s substantial land size, it could be possible to add further bulk to the existing premises, using the airspace on top of the current open air car parking area above the restaurant being one possibility, subject to engineering feasibility.

“Longer term partial or full conversion to residential use could also have appeal with the top three levels of the building already having over 150 metres of external decking. This would be in keeping with the growing trend, which the Auckland Council is encouraging, to incorporate residential dwellings into new developments and redevelopments in Newmarket.

“Other options could include conversion to dedicated student accommodation given the closeness of Auckland University’s new campus and Auckland medical school or hotel accommodation which could draw clientele from out-of-town visitors to Auckland Hospital as well as events at The Domain.”

(From left to right) Tony Chaudhary, Colin McKenna, Chris Bayley, and David Bayley of Bayleys.